Money tight under current state funding formulas

Published 7:00 pm, Thursday, August 14, 2008

It wasn't a fun process, but Plainview ISD Executive Director of Finance Rusty Ingram went through it, as have his colleagues at other area school districts.

The process is figuring out when school districts on the South Plains will run out of money if the state does not address funding issues.

For Plainview, in the best, worst-case scenario, that will happen during the 2013-14 school year, according to information Ingram provided at a recent budget workshop for the PISD school board.

The report is similar to one done by Elaine Cogburn, business manager for Frenship ISD in Wolfforth.

In Cogburn's best, worst-case scenario, Frenship "can make it to 2012 before I run out of money."

Both Ingram and Cogburn were quick to point out that the projections are based on a number of assumptions.

In the case of Plainview, Ingram said, the different scenarios he came up with involve different inflation rates and different rates of student population loss.

They were coupled with the assumption that the state will not make any changes in the way it currently funds public education.

As part of that process, Cogburn explained, the state had individual school districts calculate three revenue scenarios: the first for 2005-06; the second for 2006-07 before the current legislation was adopted; and the third for 2006-07 after the legislation was adopted.

The schools then took the highest of those three calculations as their target revenue related to weighted average daily attendance.

The only problem, Cogburn continued, was that after the districts went through that process, the Texas Education Agency changed the numbers.

In Frenship's case, it actually helped.

But Ingram said in Plainview's case it hurt. The resulting change in target revenue cost the district $1.8 million, he said.

"That's one of the things that killed us," Ingram said as he continued his work on the budget for the coming school year.

The proposed budget is $39,120,796, and that will result in a deficit. Ingram has been charged by the school board to find a way to trim that estimate by approximately $1 million.

Ingram and Cogburn said much of the funding problems are related to House Bill 1.

"All of the training I've been going to, with what other school districts are finding, is that the only way you can increase your revenue is through increasing your student population and class attendance," Ingram said.

He further explained that the state has set up a formula that reduces state revenue to balance increases in local revenue raised through tax increases, beyond a certain point.

Ingram described the results of the funding process as a box.

"The way the state has this formula set up, the more we raise taxes, the (more) the state cuts back. We've got to stay within this box," he said.

However, Cogburn said, if nothing else, districts have a pretty good idea of how things could look down the road - and the picture is not pretty.

"Because we pretty much know what our revenues are, districts that are astute have begun projecting into the future," she said, adding that it is critical to get state legislatures to understand the pinch rural school districts are feeling.

Cogburn hopes the state will set a floor for the target revenue rate at $5,000. That is because most districts across the state fall into a range from $4,000-$6,000. That floor would put most districts in a position they could handle, she said.

In the meantime, she said, those business managers who have done the projections are encouraging everybody else to do them as well.

"We don't want someone waking up in two years and realizing they are out of money."

Ingram was blunt with his assessment.

"If something is not done at the state level and at the local level, we're going to potentially run out of money," he said.

The Plainview school board got that message loud and clear as it moved through the recent budget workshop.

"This, to me, is a critical point in the history of this school district," board member Wes Naron said as the discussion revolved around a deficit budget and possible continued drops in student attendance and completion rates.

Naron said he sees areas in which the district can respond, but that will take some aggressive efforts.

He advocated budgeting money for advertising.

"I believe we can get more aggressive. I want to see somebody take the bull by the horns and go hunting (for additional revenue).

"The first way we can do it is retain students we have in this district and bring more students in," he said.

Still, Ingram said, the state is going to have to address the funding issue.